Ladies and gentlemen, thank you for standing by and welcome to the Solid Biosciences Update Call. At this time all participants are in a listen-only mode. Please be advised that today's conference may be recorded. Later, we will conduct a question-and-answer session, and instructions will be given at that time. I would now like to hand the conference over to your speaker today, Ms. Jennifer Ziolkowski, Chief Financial Officer. Ma'am, you may begin.

Thank you, Crystal. Good morning, and welcome to the Solid Biosciences third quarter 2020 financial results and business update conference call. Today's call is being recorded. Before we get started, I would like to remind everyone that during this conference call, we may make forward-looking statements, including statements about the company's financial results, financial guidance, future business strategies and operations, and product development and regulatory processes, including statements about the ongoing IGNITE DMD clinical trial. Actual results could differ materially from those discussed in these forward-looking statements due to a number of important factors, including uncertainty inherent in the clinical development and regulatory process, the extent and duration of the impact of the COVID-19 pandemic, and other risks described in the Risk Factors section of our most recently filed quarterly report on Form 10-Q and other periodic reports filed with the SEC. We undertake no obligation to update any forward-looking statements after the date of this call. For introductions and opening remarks, I'd like to turn the call over to Ilan Ganot, Co-Founder, President, and Chief Executive Officer of Solid Biosciences. Ilan?

Thanks, Jen. Good morning, and thank you all for dialing in. Also joining us today are Joel Schneider, our Chief Technology Officer; and Cathryn Clary, our acting Chief Medical Officer. The focus of today's call is to review recent important advances for our company and patients living with Duchenne muscular dystrophy. The first is the FDA's lifting of the technical hold on the Phase I/II IGNITE DMD trial of SGT-001, which puts us on track to resume dosing in the trial in the first quarter of 2021. The second is the additional capital that we brought into the company from a strategic collaboration with Ultragenyx, and then at-the-market, or ATM, equity financing. While each of these events is important individually, combined they help us further our goal of developing gene therapies that have the potential to improve outcomes for patients living with Duchenne and creating value for our shareholders. They also give us a great deal of forward momentum as we close out 2020 and move into 2021. During today's call, we will discuss these recent events in the context of our overall corporate strategy. We will review our third quarter 2020 financial results and provide an overview of our near-term goals and priorities. We'll then take your questions. Before reviewing our recent progress, I'd like to take a step back and remind everyone that Solid was founded specifically to focus on transformative therapies for Duchenne. As many of you know, I'm a father of a child with Duchenne. This experience and the deep relationships that we have established with other members of the community are daily reminders of the urgent need that these patients have for therapies that can improve outcomes and quality of life. There are also stark reminders of the need to balance rapid development with ensuring that patient safety is always a priority. As an emerging therapeutic modality, there is still much to be learned about gene therapy. We believe that advancing the field of Duchenne gene therapy will create additional opportunities for Solid to achieve our mission of improving outcomes for patients with Duchenne. The potential for these opportunities was a key driver for entering into the collaboration with Ultragenyx, and patient safety has driven and will continue to drive every decision we make with respect to clinical development and manufacturing of our current and potential future therapeutic candidates. With this overarching mission in mind, let me now review our recent progress. As most of you are likely aware, in November 2019, the FDA placed a clinical hold on the IGNITE DMD trial after the third patient in the 2E14 vg per kilogram dose cohort experienced a serious adverse event, or SAE. Following this SAE, we conducted a thorough internal review of the potential factors that could have contributed to it, looking at all aspects of the program and consulted with leading experts to inform our decision-making and communications with the FDA. Based on a review of the information we submitted regarding manufacturing improvements, clinical protocol amendment, and all the safety, efficacy, and functional data generated to date in IGNITE DMD, the FDA lifted the clinical hold on the IGNITE trial in early October of this year. Our Data Safety Monitoring Board has approved the amended protocol, and we are well underway towards completing the activities necessary to resume dosing, including submitting the amended protocol to the institutional review boards at our clinical site and initiating patient screening following appropriate approvals. Resuming screening and dosing in IGNITE DMD as quickly as possible is our top priority.

Thank you, Ilan. As part of our commitment to continuously improve our manufacturing processes over the years, we have now implemented process changes that remove the majority of empty viral capsids from the SGT-001 drug product, effectively allowing target dosing of 2E14 vector genomes per kilogram to be achieved with fewer viral particles, thereby reducing the total viral load delivered to patients. As with all AAV production methods, pre-purification, our process produces full capsids, which contain our microdystrophin, as well as empty capsids, both of which contribute to the total viral load administered. The improvements to our manufacturing process reduced the number of empty capsids in the mix, and we are now averaging 90% full capsids. This means that we can continue administering 2E14 viral particles that contain our differentiated microdystrophin construct but are able to do so while delivering fewer empty capsids. This reduces the total number of viral particles without reducing our dose. This reduction, combined with a reduction in the way the patient is dosed and the protocol changes Cathryn will discuss, is intended to support safe dosing of SGT-001 for the duration of the IGNITE DMD trial. One key criterion that was important to the FDA in terms of lifting the clinical hold was to understand the comparability of our previous SGT-001 manufacturing process and our improved process with regards to microdystrophin expression. This required the development of an assay that would produce a quantitative assessment of protein expression levels. Over the last few years, we've developed an in vitro assay that measures expression of our microdystrophin construct, following addition of SGT-001 to cells grown in culture. This assay enables us to rapidly and quantitatively measure the amount of microdystrophin expressed. We used this assay to quantify microdystrophin expression from SGT-001 made with our previous process and SGT-001 made with our new process. And we were able to show that expression levels were similar between the processes. We are proud of our improved HSV-based manufacturing process, and we believe that it offers significant advantages in developing gene therapies in therapeutic areas that require large systemic doses.

Thank you, Joel. After carefully reviewing our patient safety data and consulting with clinical and scientific experts, we believe that there may be a correlation between viral loads and complement activation. To mitigate the risk of serious drug-related adverse events, which are associated with complement activation, we've amended the IGNITE DMD protocol to include the prophylactic use of two complement inhibitors: eculizumab and C1 esterase inhibitor, and also an increase in the prednisone dose utilized in the first month post-dosing. Based on the advice of the experts we consulted about the time course of the role that complement plays in the immune system response, we believe that eculizumab and C1 esterase inhibitor, each of which acts at a different point in the complement activation cascade, may be more effective when administered together prior to the potential onset of the complement activation process. We also believe that prophylactic administration of both of these agents will more effectively prevent or reduce the magnitude of a potential complement response. We are also increasing the prednisone dose in the first month post-dosing from 1 milligram per kilogram to 2 milligrams per kilogram. We're also reducing the maximum weight of the next two patients dosed to 18 kilograms per patient, which in combination with the reduction in empty capsids that Joel just described, will reduce the total viral load delivered to patients. While we won't need additional approval from the FDA to increase the weight limit after dosing our next two patients, patient 7 and 8 in the trial, we'll review the totality of the 30-day clinical and laboratory data for each of them with our Data Safety Monitoring Board before we move on to dose the next patient. After that, our protocol allows for an increase in the weight of subsequent patients. We intend to move as rapidly as possible with dosing additional patients while maintaining a strong focus on patient safety. As mentioned earlier, our submission to the FDA also included updated functional efficacy data. This included the six-minute walk test and the North Star Ambulatory Assessment for all patients dosed to date in IGNITE DMD. We're continuing to collect 12-month data and assessments from all six patients dosed in IGNITE DMD, and we look forward to sharing these results with you at an appropriate time.

Thanks, Cathryn. Now let me turn to the strategic collaboration with Ultragenyx that we announced two weeks ago, the goal of which is to expand the pipeline of potential gene therapies for Duchenne and provide patients with additional therapeutic options. We believe this collaboration has a great chance of achieving these goals for two reasons: first, it combines our differentiated microdystrophin containing the neuronal nitric oxide synthase, or NOS domain, with Ultragenyx's HeLa producer cell line manufacturing platform for use with AAV variants. We are excited that this collaboration creates opportunities for our unique microdystrophin to be used in multiple vectors and with multiple manufacturing processes and to be working with a leader in the field of rare disease therapies to develop additional therapies for patients with Duchenne. Second, the investment by Ultragenyx provides us with capital that enables us to move forward with the development of SGT-001 and provides potential opportunities for longer-term value creation through milestones and royalties generated from programs developed under the collaboration. As part of this collaboration, Ultragenyx made a $40 million investment in Solid at $5.11 per share and has agreed to pay up to $255 million upon achievement of certain milestones and tiered royalties on worldwide net sales. Upon achievement of proof of concept, they have the right to opt in to co-fund programs in the collaboration in return for participation in the profit share or increased royalty payments. Importantly, as we move forward with this exciting collaboration, we retained full rights to SGT-001 as well as the opportunity to establish additional partnerships around SGT-001 or our microdystrophin construct outside the AAV8 variant.

Thank you, Ilan. Earlier today, we filed our Form 10-Q for the quarter ended September 30, 2020, which contains detailed financial results and is available on the Solid website. Rather than focusing on that detailed information that's provided in the 10-Q, I'd like to provide an update regarding how our recent activity, which resulted in additional capital of approximately $64 million, has extended our cash runway into the second half of 2021. As of September 30, 2020, we had cash and cash equivalents of $24.8 million. As Ilan noted, in October, we had two additional events that strengthened our balance sheet. The first was the execution of the strategic collaboration agreement with Ultragenyx, which included a $40 million upfront investment in Solid. In addition, we also completed an ATM equity financing that resulted in net proceeds of $23.2 million. These additional cash resources enable us to make further progress in support of our clinical and manufacturing objectives in 2021, including reinitiating dosing in IGNITE DMD in the first quarter.

After what has been a rather challenging year, this is an exciting time for everyone at Solid. I would like to take this opportunity to thank the patients and physicians who are participating in the IGNITE DMD trial for their support of our efforts to advance SGT-001, and for their patience over the last several months as we resolve the clinical hold and as we take the necessary steps to resume dosing safely. We remain committed to the Duchenne community and thank its members and our employees for their continued support and dedication to our shared mission.

And our first question comes from the line of Joseph Schwartz with SVB Leerink. Your line is open. Mr. Schwartz, if your line is on mute, please unmute it. Our next question comes from Martin Auster with Credit Suisse. Your line is open.

Hi, everyone. This is Mark on for Marty. Thanks for taking my questions. I guess, first, I'm curious for more details on how the manufacturing change improves product quality. And specifically, what was the fraction of full – or – to total capsids before your manufacturing change? And then in terms of your manufacturing process itself, how confident are you that you'll be able to efficiently scale up this new process as you advance further? And then as far as the IGNITE DMD trial, as you mentioned, you plan to resume dosing in Q1. I'm just curious to get a little better understanding of your disclosure timelines. And specifically, how many patients do you plan to dose in the IGNITE study, if all goes well with the first two? And I realize it's early, but how soon do you think you could provide investors with clinical data from the newly dosed patients? Thank you.

Hi, thanks for the questions. I think Joel is going to take the manufacturing one, and maybe Cathryn will talk about IGNITE DMD after.

Sure, thanks for the question. As we have highlighted previously, our strategy around manufacturing improvements really was aimed to be synergistic with our clinical mitigation strategy that was proposed to the FDA. And so specifically, by removing empty capsids from the SGT-001 drug product, we're effectively reducing the total viral load given to patients. And so what we highlighted today, now having a number of GMP manufacturing runs under our belts, that we're averaging about 90% full capsids in the mix. So 90% full and about 10% empty. Previously, we were at about 50% full and empty. And as a reminder, all methods produce a mix of full and empty capsids, and sponsors, based on their experiences choose to either eliminate those or not. And in general, this information is fairly proprietary. It isn't really often communicated or shared. We're trying to be a little forward-looking and a bit educating as we think about the path forward. So really importantly and excitingly for ourselves, this – the removal of empty capsids really has a meaningful and significant reduction in the total of viral load. So same effective dose, so we're going back into the clinic with continuing our dose level of 2 times ten to the fourteenth vector genomes per kilogram, but doing that with a smaller total load that any patient would be given. And so alongside the clinical mitigation strategy, we think this is a very compelling and exciting way to try and assure safety as we go back into IGNITE DMD. I think the second question was related to our confidence in scaling. I think importantly, we transitioned our program from an adherent small-scale process to a suspension manufacturing method well before going into clinic. And so all patients that have been dosed with SGT-001 had been done so with the suspension-based manufacturing method. That doesn't mean that we're done. We're, in fact, we're going to continue to improve the product up until the day we lock down the manufacturing method. That's our responsibility. And I think our recent accomplishments, both on the CMC improvement as well as the analytical improvements related to our in vitro expression methods, really highlight how forward-looking we're trying to be on CMC product development. And so fundamentally, I think we've done a lot of hard work, and there's certainly more to do, but we're excited and looking forward to going back to the clinic with a dramatically improved product. Let me hand it over to Cathryn to answer your clinical questions.

Thanks, Joel, and thanks for the questions about IGNITE DMD. We are truly excited about getting back into the clinic and dosing our next patients. And as Ilan mentioned, there's a couple of activities that are taking place now to ensure that, that happens in the first quarter. We are working with our investigators closely to identify patients who are at the appropriate weight, as we send our protocol and regulatory packages to the IRBs and the IBCs at the different sites. Our first two patients will be – we're going to proceed cautiously with our new risk mitigation strategies and new manufacturing process on board, which gives us confidence that we'll be able to treat patients safely. But for each of the first two patients, we will review 30 days of clinical and laboratory data with our DSMB before we move on to the next patient. So we'll dose the first patient in the first quarter, we'll evaluate the information from that patient with the DSMB, and move on to the second patient. So some of that will depend on how many patients we do decide to dose next year. We haven't – we've got some plans, but haven't revealed that number yet, but we do plan to actively dose throughout the year. In terms of data disclosure, we're currently, this week, our sixth patient dosed in the trial, who had the SAE, which led to the clinical hold, is actually in clinic getting his one-year efficacy evaluation and safety evaluation. And we will be looking at all that data for the first six patients, three at the low dose, three at the high dose and compile it and decide when the most appropriate time is to reveal that data, including some of the functional data, such as the North Star and the six-minute walk test.

Okay. Got it. And then so it sounds, let's say, would you at least as you're dosing one by one, would there be potential disclosure of just you're moving on to the next patient? Would we get some sort of signal like that even?

In terms of when we're moving on – in terms of when we're moving on to the next patient? Maybe I should…

Maybe I should jump in. It's Ilan. We're not going to guide to the level of disclosure that we will be providing Jen. I would just say that you probably would have come to feel this from Solid, we're not shy around disclosures. We update on everything that's important and that the market needs to know, and we are excited to be dosing patients again in the first quarter. As Cathryn mentioned, a lot more data is getting gathered behind it. You also asked when we will provide clinical data from the new patients that will be dosed. Again, not something we're going to guide for today, but having already dosed six patients and collected data for over two years on those patients, I think we have a very good understanding of what we're looking for, what we're comparing it to, what endpoints and what timing for biopsies. And all of that will hopefully be shared appropriately next year.

Okay, great. Thanks for all the clarity.

Our next question comes from Joseph Schwartz with SVB Leerink. Your line is open.

Great. Thanks very much and congrats on the progress. I was just wondering if you could describe for us some more how you're quantifying the amount of microdystrophin, specifically what tools? Is it something like mass spec or something different? Is it semiquantitative like western blot? Is it a combination of the two? Or any insight here would be very interesting as everyone, including the agency, continues to learn about the best ways to characterize the potency of drugs like SGT-001.

Thank you, Joe. It's good to hear from you. I'm glad you got the phone to work. This is in Joel's corner.

Sure. Thanks, Joe. We quantify microdystrophin expression in the clinic using multiple methods, immunofluorescence, which gives us a very good idea of how the protein is localizing to the muscle membrane. We also have previously disclosed data from both the use of western blot and mass spec. So we're looking at all three methods collectively and orthogonally to really fully capture the amount of protein expression that we're detecting. You're absolutely right. The agency's expectations are clearly evolving, not just on the clinical side, but also on the CMC side. And so the in vitro expression assay that we've developed is a very quantitative way and actually a very quick way to get an assessment of microdystrophin expression produced in culturing cells, especially during manufacturing – improvement to manufacturing comparability, which is how we most recently utilized in terms of having the hold lifted. Similar to our expression methods in the clinic, we also have a variety of different ways that we assess microdystrophin expression in the in vitro setting as well. But I think excitingly that was something that the team has been working on for a few years. We envisioned that this would be a way to demonstrate protein expression in the in vitro setting, and it's part of a releasing characterization strategy of our GMP product. And we're really excited to see the FDA view this as a viable path to demonstrate protein expression and specifically comparability of our improved manufacturing method.

Okay, great. That's helpful. Thanks. And then I know that you retained full rights to SGT-001 following the Ultragenyx deal and you're still able to explore additional partnerships around that product or even potentially avail yourselves of other vectors to deliver it. How are you thinking about the desire, if at all, to explore other vectors and bring them in-house and do that yourself versus perhaps securing additional partnerships like you just did?

Thanks. Great question, Joe. I mean, you know the background here, and despite a lot of progress that has been made by us and by many others in the field, I am still very concerned around the availability of drug product, distribution, manufacturability, access, global access. And every time there's an opportunity to create more options for patients, I think we're going to take a very serious look at it. We also recognize that the gene therapies that are in the clinic today are early days. We're learning a ton. Every patient is a world of data, and even now, in interactions with the FDA, we keep showing them how to do things. They keep showing us how to do things. It's a very iterative process. Same thing goes for next-generation vector and delivery systems. I mean, we've been on the research front on next-generation vectors for now five, six years now, including a number of collaborations that we were public about and many that we weren't. And we are constantly looking to identify things that have better proponent to muscle and things that would allow easier manufacturability of drug products and improvements in delivery, but also in potential trials, gene and vector and promoter biology. So always open, always interested in a lot of in-house work in our labs, but also then to collaborate with other like-minded groups. Ultragenyx is a great example, great chemistry between the teams and somebody that brings a lot of regulative capabilities, regulatory, manufacturing, delivery and people that we are very impressed with and are excited to work with.

Great, thank you.

And I am not showing any further questions at this time. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone have a good day.